Free File, which this year contains many changes and updates -- including more free state tax return options and easier Form W-2 imports -- is now available for you to use.
According to the Internal Revenue Service (IRS) and Free File Alliance, 13 brand-name tax software providers are making their federal tax return products available for free. If your adjusted gross income was $62,000 or less during 2015, you are eligible for at least one, if not more, of these tax software products. The income limitation is $2,000 higher than last year.
For taxpayers who earned more than $62,000, Free File Fillable Forms -- the electronic version of IRS paper forms -- is now available. “You don’t have to be an expert on taxes. Free File software can help walk you through the steps and help you get it right,” said John A. Koskinen, IRS Commissioner. “For 13 years, this partnership between the IRS and the Free File Alliance has helped taxpayers. The real winner in this partnership has been the nation’s taxpayers.”
Free File is available only at IRS.gov/FreeFile. Since 2003, more than 46 million people have used Free File, saving nearly $1.4 billion based on a conservative $30-fee estimate.
The Free File Alliance and its members also are active participants in the Security Summit Initiative to provide additional identity theft safeguards for tax filing and for the Security Awareness campaign -- Taxes. Security. Together. -- that encourages taxpayers to take steps to better protect their data.
For 2016, more Free File software providers are offering both free federal and free state tax return preparation for states with income tax requirements. Some providers also are offering state tax return preparation for a fee. State tax return offers are at the discretion of the providers.
Additionally, new for this year, several software providers also are offering easy importing of Form W-2 information which can help reduce errors.
More than 70% of all taxpayers -- 100 million people -- are eligible for the software products. Each of the 13 companies has its own special offers, generally based on age, income, or state residency. Taxpayers can review each company offer or they can use a “Help Me” tool that will find the software for which they are eligible, including which companies offer a free state return.
Health care requirements
Free File also can help taxpayers with the new health care requirements. Just like last filing season, almost everyone will need to do something when filing a tax return this year. For each month in 2015, taxpayers and everyone on their return must:
- Report health care coverage, or
- Claim an exemption from coverage or
- Make a shared responsibility payment with their tax return.
Most people will simply have to check a box to report health care coverage for the entire year.
A taxpayer or anyone on his/her return who purchased coverage from the Health Insurance Marketplace may be eligible for the premium tax credit. If the purchaser opted for any advance payments of the premium tax credit to help with their monthly insurance premium payments, they must file a tax return, even if they were not required to file. Taxpayers must reconcile their advance payments with the amount that was due. More information is available at IRS.gov/aca.
Taxpayers have the option to prepare their return at any time and schedule a tax payment as late as the tax deadline, which, for 2016, is April 18. Taxpayers who cannot meet the April 18 tax filing deadline can also use Free File to file a six-month extension.
Free File can also help taxpayers with myRA, a new, free, retirement savings account from the Treasury Department. Taxpayers who have a myRA account may use Free File to deposit their tax refund or a portion of their refund into their myRA account. Just use Form 8888 or follow your software product’s instructions.